The distribution and diversity of people living abroad who are originally from Serbia is very difficult to determine. From experience, we know that many of them maintain strong connections with our country through family or through family property they own. We have also observed that most returnees, or those planning to return to Serbia, and who plan to invest in real estate, tend to pay in cash.
However, our communication with the diaspora has also shown us that there is a significant group of non-residents who do not own property in Serbia, whose family ties have weakened, but who would like to renew their connection with their country of origin or even return to their hometown in the future. For this group, investing in real estate in our country would be an ideal solution, but many of them are not in a position to make such an investment upfront.
This group of people served as inspiration and motivation for us to initiate the creation of a new financial product, Loans for non-residents.
Loans and diaspora – Is it possible?
Since we know that people are more likely to return when they own property, and after recognizing the need for this type of loan, we began to explore the systemic and market possibilities for creating this new financial product back in 2021.
After realising that it is not possible to obtain a loan for purchasing real estate in Serbia from institutions within the European Union or the United States, we conducted an analysis of domestic regulations to determine whether Serbian legislation allows for housing loans to be granted to non-residents. We hired a financial expert to conduct desk analysis, and since the conclusion was that there is no legal obstacle, we approached the National Bank of Serbia to request their opinion.
The National Bank of Serbia agreed that there are no legal obstacles under domestic regulations for granting housing loans to non-residents. However, for each specific loan product, there must be a proposal from the commercial bank itself in order for the National Bank to give final approval.
The agreement from the country’s main financial institution gave us momentum, and we enthusiastically began researching and analysing the needs of the diaspora through our community and contacts by distributing a survey, which a large number of respondents completed. The survey confirmed what we already knew from experience – that there is indeed a significant demand for non-resident housing loans in Serbia.
After obtaining the National Bank’s opinion and completing our market analysis, we approached Poštanska Štedionica Bank to explain the potential of this loan product. To our satisfaction, we were met with interest and openness to collaboration. Based on the research done by the Returning Point team, a team of experts at Poštanska Štedionica Bank developed the product – loans for non-residents – which was launched in 2022 and made available to all interested parties. More information about the loan, required documentation, and terms can be found on the Bank’s website.
How have loans for non-residents performed?
Considering that the risk involved in approving housing loans for members of the diaspora is higher than when granting them to residents, the process of obtaining the loan is somewhat more complex, and the down payment is larger. However, if we take into account the higher incomes of non-residents employed abroad and the difference in real estate prices between Serbia and Western countries, from where most interested parties come, it can be concluded that the ability to save for a down payment and comfortably repay the loan is quite strong. This is confirmed by the growing number of applications that Poštanska Štedionica Bank receives, as well as the fact that other commercial banks have recognized the potential of this financial product and adopted the same model, offering it to their clients.
On the Kredium website, a platform that provides detailed information on purchasing a home in Serbia through loans, we have seen that Banka Intesa and AIK Banka now also offer loans for the Serbian diaspora. We hope that more commercial banks will soon develop their own versions of this type of loan.
*
As Returning Point, we are pleased to watch how an initiative that originated from within our ranks continues to grow and expand. We are especially happy that we were able to assist our people abroad in this way and to provide a concrete motivation for them to return to Serbia in the future, whether to live, work, or retire.
